Inflation, economic downturn: Telcos say they can’t meet network rollout obligations

ISLAMABAD: The cellular mobile operators (CMOs) have conveyed their concerns to the government that due to high inflation and economic downturn, it was becoming difficult to meet the obligations of network rollout, acknowledging that their quality of service has deteriorated.

The letter written to the Ministry of IT & Telecom by Jazz, Telenor and Ufone stated that the “Network Rollout Obligations” defined in the licences includes providing high quality network services in coverage areas.

“We are constrained to be unable to meet the rollout obligations defined in our respective licences due to floods, economic conditions and import restrictions,” the letter added. The mobile companies said that they had already written detailed submissions to the telecom sector regulator, the Pakistan Telecommunication Authority (PTA), in January, 2023, highlighting practical difficulties in import of telecommunication-related equipment owing to strict restrictions imposed by the State Bank of Pakistan.

The telecos said that they were unable to import any such telecommunication equipment that was necessary to install for operating telecom system and to provide telecom services.

“The challenges we are facing to handle Quality of Service (QoS) upgrades and network rollout due to the prevailing economic conditions and policies of the Government of Pakistan/ State Bank of Pakistan (SBP) particularly relating to opening of LC/IC for import of telecom equipment nor declaring such equipment as Critical/ Priority/ Essential items, hence, are severely discouraging the import of telecom equipment into Pakistan,” the companies added.

The letter also added that the mobile companies were unable to clear payments to foreign vendors for previous consignments received for telecom equipment, and as a result, those vendors were reluctant to honor any new requests for the equipment.

It added that the SBP’s Circular No 20 dated December 27, 2022 did not regard the telecom sector related equipment as “priority/ essential items” in terms of renewing/ opening of IC/ LC, resulting in all shipments of telecos being put on hold.

“In view of the foregoing, it is humbly submitted that CMOs will not be able to meet the network rollout obligations as per the deadlines given in the respective licences.” they said, adding: “It is therefore, requested that annual rollout obligations’ timelines be revised and aligned in consultation with all CMOs considering the prevailing situation in the country in line with Note (x) of newly issued/renewed License clause Appendex-1 (A1 – Network-Rollout).”

The telecom companies said that they were looking forward to the government and PTA for support for the continuity of business in such tough economic and financial times in Pakistan.